Catherine O’Brien : Great. And maybe just one for Dave. Can you just drill in a little by region for both fourth quarter unit revenue performance and how those trends are evolving to the first quarter? You mentioned as well as your peers that sounds like there’s been a bit of an inflection in domestic. LatAm near perhaps it’s more challenged just given some of the industry capacity. What are you seeing? What do you see in fourth quarter? And what underlies that 1Q guide? Thanks.
Dave Clark : Yeah. Hi, Caty. Thanks for question. We’re seeing some really positive trends. Demand is certainly remaining healthy. And I would say the unit revenue is being driven by both that healthy demand as well as capacity movements. So for example, in Q1, we expect our domestic unit revenue to be positive year-over-year. I know for the system, we’re still slightly negative. But domestically, we expect it to be positive. That demand remains very healthy, and we optimize our own capacity to align with demand when we see the industry come down a bit as well. Looking internationally, LatAm remains very strong. We’ve been adding to it to really increase our focus and service of those markets. That always pressures unit revenue a bit and we see a little while to absorb, but those are bread and butter markets for us, and we remain extremely committed to them.
I’d also note, internationally, TransAtlantic continues to perform really well. As Joanna mentioned earlier, fourth quarter RASM was up double digits on about 70% more capacity, we expect that level of strength to not only go through the first quarter, but to probably accelerate further. So feeling very good about where demand is and about how we are more closely aligning our capacity with that demand.
Catherine O’Brien : Thanks so much.
Operator: Our next question comes from Helane Becker, TD Cowen.
Helane Becker : Thanks very much, operator. Hi, everybody. And thank you for the time. And yes, I will add my congrats to Robin and Joanna too. On Slide 10, Ursula, you talked about CapEx, and it looks like it accelerates through the year, — so is that an increase in just the way the cadence of the way it’s working? Or is it an increase in PDPs? Or how should we think about the way the way that grows?
Ursula Hurley : Yeah. Thanks for the question, Helane. The majority of that $1.6 billion in CapEx is aircraft, I think over 90% of it is dependent on aircraft. So it’s really just the timing of those deliveries throughout the year that’s driving the Q1 versus the full year.
Helane Becker : Got it. That’s very helpful. And then just for my follow-up question, how are you thinking about like raising capital going forward? Would you — I mean, at these levels, I don’t think you would do equity. But would you consider doing more leasing of aircraft or doing, I don’t know, testing the ABS market again or doing something to maybe grow debt but get yourselves in a position where you can generate positive cash flow at some point?
Ursula Hurley : So in 2023, we financed $1.4 billion of aircraft CapEx. We were exceptionally successful in the finance lease market. I think what we value when we look at financing, in general, is obviously the cost of the capital, but also the flexibility and the ability to hopefully pay down debt overtime. And so we are, as I mentioned, in the market at the moment, assessing opportunities to raise capital in 2024. And so we’ll be focusing on, obviously, cost of funding as well as flexibility. There’s a decent amount of money in the finance lease market at the moment. But obviously, we — I mentioned earlier, we have a very large financeable asset pool. So we’ll continue to optimize across markets and across asset classes as we progress forward.
Helane Becker : Okay. That’s really helpful. Thank you.
Operator: Our next question comes from Savi Syth, Raymond James.
Savi Syth : Hey, good morning, everyone. And Robin’s been a pleasure, and wish you the best on the next chapter here and congrats to Joanna and Warren. Joanna, you mentioned premium gaps. I was wondering if you can elaborate on that. I’m guessing one of them was probably still exceeding that you’re introducing in 1Q. But — just wonder if you can elaborate a little bit more on what you mentioned there.
Joanna Geraghty : Yeah. We’ll talk a bit more about it at Investor Day. But if you think about how we segment the cabin, currently, we have obviously meant for a subset of our market, even more space. We have basic economy, and we have sort of our core main, core Blue product. And so as we think about preferred seating, that’s one piece of it, but we think there are potentially additional product offerings we could introduce that tap into a broader spectrum of customers. And we are focused, particularly with a focus on like the leisure customer, how we close any gaps in those offerings. So it’s both in terms of how we sell, but also the actual hard product itself.
Savi Syth : Understood. And if I might, on the just kind of refocusing on the high-value leisure premium leisure passenger and your kind of fleet mix? And what’s the role that the A220 plays in this? And do you kind of expect — I think right now, you have around 20% of your revenue that comes from business. Do you expect that mix to change overtime?
Joanna Geraghty : So our focus continues to be on offering a strong product portfolio for all of our customers, whether you’re a more price-sensitive customer or a customer who wants a more premium experience. I mentioned over 25% of our seats fall into it even more space or the mint category. If you look at the A220, it’s got 90% more, even more space seats than the — so as you just think about how we are modernizing the fleet, naturally, that introduces more — even more space seats. But we want to be the airline that can serve all of our leisure customers as well as business customers because the product offering does speak to those customers to the extent we have a schedule that works for them. So we’ll continue to invest in sort of the broad array.
But this quarter, in particular, we had an extremely strong premium offering both even more space and Mint did exceptionally well from a revenue perspective. And so we’ll continue to lean into the areas that are doing well, but we want to make sure we have a product offering that caters to a whole wide spectrum of customers.
Savi Syth : Appreciate it. Thank you.
Operator: Our next question comes from Andrew Didora, Bank of America.
Andrew Didora : Hey, good morning, everyone. Most of my questions have been answered already, but just one, as it relates to the GTF, First line, you’re still going the exposures for 2025 and the impact there. But I’ve just been trying to think through what would be the 2025 capacity tailwind from just getting the 2024 GTF impacted planes coming back on?
Ursula Hurley : Yeah, it’s a good question. We don’t yet have detailed color from Pratt & Whitney on our 2025 exposure. I don’t believe that it will drastically improve in regards to the average number of aircraft on the ground throughout the year. But more to come on that as we continue to work with Pratt to give you more color in May.
